2004 (3) TMI 122 - AT - Customs

Confiscation of electronic goods - Goods involved are non-notified goods under Section 123 - burden to prove the smuggled character of the goods - Foreign marking - Penalty - HELD THAT - In any event, in the instant case, the goods involved are not notified goods and the burden to prove that they are smuggled into the country lies with the department which burden has not been discharged. I also note that the Central Board of Excise and Customs vide Circular F.N. 04/149/65-Cus-III, dated 14-12-65 has issued guidelines in regard to town seizure. When the goods are recovered from a person who is not proved to be the importer of the goods and claims to be a purchaser of the imported goods, onus is always on the customs authorities to establish that the goods were imported contrary to any import or prohibition or restriction and they have to bring home the guilt to the person alleged to have committed a particular offence by adducing satisfactory evidence. The case law cited by the learned Counsel for the appellants in the matter of Sadbhavana v. CC, 2003 (8) TMI 113 - CESTAT, NEW DELHI wherein it has been held that failure to produce document regarding legal import/possession of foreign origin goods, the burden to prove the smuggled character of the goods lies on the department, squarely applies to the facts of the present case. In the instant case as noted above, the goods are non notified goods, and are freely available in the open market for any one to purchase or do business. Conclusion - Tribunal found Revenue failed to prove goods were smuggled into the country - Orders of confiscation and penalties were deemed not legal and proper - Appeals were allowed with consequential relief, if any, in favor of the appellants.

Summary

Issues involved: Appeals against orders upholding confiscation of electronic goods and imposing penalties under Section 112(b) of the Customs Act, 1962.

Details of the Judgment:

Issue 1: Confiscation and Penalties
- Appeals challenged orders confiscating electronic goods and imposing penalties under Section 112(b) of the Customs Act, 1962.
- Goods were alleged to be of foreign origin and illicitly imported, leading to confiscation.
- Appellants argued that burden to prove smuggling lies with the department, citing relevant case law.
- Customs authorities claimed goods were of foreign origin and not covered by legal documents, indicating smuggling.

Issue 2: Burden of Proof
- Appellants contended that goods were non-notified and freely importable under Open General Licence.
- Customs argued that foreign origin of goods, lack of legal documents, and suspicious transaction details indicated smuggling.
- Tribunal noted that burden to prove smuggling rests with the department, especially for non-notified goods.

Issue 3: Legal Precedents
- Reference made to Circular providing guidelines on town seizure and burden of proof for smuggling.
- Tribunal emphasized the need for conclusive evidence to establish unauthorized importation contrary to prohibition or restriction.
- Citing case law, Tribunal reiterated that failure to produce documents shifts burden of proving smuggling to the department.

Conclusion:
- Tribunal found Revenue failed to prove goods were smuggled into the country.
- Orders of confiscation and penalties were deemed not legal and proper.
- Appeals were allowed with consequential relief, if any, in favor of the appellants.